14 Problem 20-14 Erro statements [LO20-1, 20-3, 20-4, 20-6] rs; change in estimate; change in principle; restatement of previous financial for the years ended December 31, 2016 Whaley Distributors is a wholesale distributor of electronic components. Financial statements and 2017, reported the following amounts and subtotals (S in millions) eBook Ask Pant sse 2016 $730 2017 810 $325 395 $405 415 $205 225 $149 174 lerences In 2018 the following situations occurred or came to light the two previous years were misstated a. Internal auditors discovered that ending inventories reported on the financial statements due to faulty internal controls. The errors were in the following amounts 2016 inventory Overstated by $11.9 million 2017 inventory Understated by 9.9 million b. A liability was accrued in 2016 for a probable payment of $6.8 million in connection with a lawsuit ultimately settled in December 018 for S3 9 million Check my w 14 b. A kability was accrued in 2016 for a probable payment of $6 8 million in connection with a lawsuit ultimately settled in December 2018 for $3.9 million c. A patent costing $17 4 million at the beginning of 2016, expected to benefit operations for a total of six years, has not been amortized since acquired d. Whaley's conveyer equipment was depreciated by the sum-of the-years digits (SYD) basis since it was acquired at the beginning of Book Ask Prirt erencesFor each situation 2016 at a cost of $28.5 million. It has an expected useful life of five years and no expected residual vakue. At the beginning of 2018, Whaley decided to switch to straight-line depreciation Required: 1. Prepare any jounal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situat described. (Ignore tax effects.) 2. Determine the amounts to be reported for each of the five items shown below from the 2016 and 2017 financial statements when those amounts are reported again in the 2016-2018 comparative financial statements. Complete this question by entering your answers in the tabs below Required 1 Required 2 Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. (Ignore tax effects.) (If no entry is required for a transaction/event, select "No journal 14 Required 1 Required 2 Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. (Ignore tax effects.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account fieldErter your answers in millions rounded to 1 deamal place (Le, 5,500,000 should be entered as 5.5)) eBook Ask Print View transaction list References Journal entry worksheet Record entry necessary as a direct result of the change or error correction. Note: Enter debits before credits General Journal 14 8 Record entry necessary as a direct result of the change or error correction eBook Ask Print References Note: Enter debits before credits. Transaction General Journal Debit Credit Record ontry Clear entry View general journal Hal 14 when those amounts are reported again in the 2016-2018 comparative financial statements. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5)) Show les bilities Shareholders eBook Assets Net Income Expenses Ask Print References 2016 2016 inventory Loss contingency Patent amortization Depreciation 2017 2016 irventory 2017 inventory Loss contingency Patent amortization Depreciatiorn C R Mc K Prev14 of 16Next